From the last two years you have seen major J-curve growth in giant E-com industry Amazon, Flipkart these are the major E-com industry in India. Due to these online stores, the physical store was suffering in their business because in online store there is some popular seller who is sitting from many years so they take the advantage of it due to which new seller was suffering. People do not buy from small sellers. Big sellers can afford to provide a discount coupon, Cashbacks, exclusive sales, brand launches offers which is not possible for small sellers, this was the inequality & many more faced by small sellers. I was also noticing this fact. So recently Our Prime Minister Narendra Modi Ji has released a new E-com policy which helps the small sellers and bringing the proper standard in E-com industry which a very great step taken.
Who are winners & who are Losers..?
The giants Amazon & Flipkart it’s obvious the new norms will hit them because they had been attracting customers through deep offers & discounts. Parties related to them - The policy says that an entity having equity participation by e-commerce marketplace entity or its cluster corporations, or having management on its inventory by e-commerce marketplace entity or its cluster corporations, won't be permissible to sell its merchandise on the platform run by such marketplace entity. This effectively prohibits any entity connected directly or indirectly from merchandising on a platform. With the new norms, Cloudtail can’t sell on Amazon. It can’t lean e-commerce terms for warehousing or supplying. Amazon India’s largest seller, Cloudtail, is a venture between NR Narayana Murthy’s catamaran Ventures and Amazon.
Another addition to the policy tightens inventory-based provisions. Inventory of a seller is going to be deemed to be controlled by an e-commerce marketplace entity if over 25% of purchases of such seller are from the marketplace entity or its cluster corporations. This may stop any brand or provider positioning completely with one marketplace, as is typically the case with several mobiles or white merchandise brands.
And of course, online buyers are also going to affect by this new e-commerce norms as they will no longer going to get a huge discount, cash back, faster delivery. E-commerce marketplaces or entities within which they have direct or indirect equity participation or shared management got to offer services to vendors on the platform at arm’s length and in a truthful and non-discriminatory manner. This might place to an end to selective promotional schemes like cash back or faster delivery, which can be deemed unfair and discriminatory below the new policy.
This has also impact on Investment & Job- The new norms will discourage foreign investment. Whereas Amazon has place billions of bucks into its India operations, Walmart spent $16 billion this year acquire Flipkart. Whereas Amazon and Flipkart were thriving, they were making an oversized range warehouse and provide jobs. The restrictions on them may dampen their business growth and therefore hit investment and cut back jobs.
Here the winners who have got benefits from new e-com norms:
The biggest winners from the new norms are the standard brick-and-mortar sellers. Within the past few years, online marketplaces had hit the brick-and-mortar hard. that they had started luring away such a lot of customers with discounts and cash back — and after all the benefit of shopping for while not stepping out — that brick-and-mortar retail was seen to be dying off shortly. The new norms limiting discounts and cash back can facilitate brick-and-mortar retail merchant retain customers. The Confederation of All India Traders welcomes the move, saying it might bring clarity as e-commerce firms and multinationals were adopting all reasonable ways to manage and dominate retail trade India.
Smaller sellers on online platforms, that are contesting the advantageous treatment carried out by Flipkart and Amazon to their entities, have reason to cheer. Any service on an e-commerce platform – supply, warehousing or simple funding choices – can currently get to be offered to any or all sellers and to not only preferred sellers. E-commerce corporations cannot charge further costs from third-party sellers for these services. Even for personal labels, retailers might not be able to advertise or promote their own brands whereas charging third-party sellers for pushing them.
It's a good time if you are planning to start your own store.
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